However, the increase in its gas charge is the single largest price yet to be imposed by a power utility in the UK.

It comes after Powergen put up its domestic gas prices last September, when they rose by 12% alongside a 7% rise for electricity customers.

Today's increase means that since January 2004, Powergen has imposed five price rises on its gas customers and four on its electricity customers.

Consumer watchdog Energywatch described Powergen's price hike as "appalling" and "further proof that the market is not delivering price protection for Britain's energy users."

And according to the regulator Ofgem, the average power bill across all suppliers in the UK - before taking today's Powergen increase into consideration - was £495 for gas and £327 for electricity, assuming that the bills were paid quarterly by cheque.

An Ofgem spokesman repeated its advice that millions of customers could still save money by switching suppliers: "Customers should switch and save, there are still savings to be made if you are prepared to shop around."

European probe

The European Commission, following complaints from Ofgem, is investigating why wholesale energy prices in the UK have risen so steeply.

It recently concluded that one factor was that big energy suppliers on the European mainland, many of which are national monopolies or semi-monopolies, have been holding back supplies of gas, thus driving up prices.

The EU competition authorities are now investigating individual companies to see what they have been up to and why.

The significance of the behaviour of European gas suppliers is that in the last couple of years, the UK has become a net importer of gas, as the country's own supplies from the North Sea have dwindled faster than originally expected.

The price of gas imported from Europe has also been driven higher by the rising cost of oil because on the continent, contracts for the supply of wholesale gas have traditionally been linked to oil prices.